Skip to main content

tv   Bloomberg Markets Asia  Bloomberg  October 23, 2016 9:00pm-12:01am EDT

9:00 pm
:00 a.m. inis not hong kong, 9:00 p.m. in new york. i am rishaad salamat. this is "bloomberg markets: asia". ♪ rishaad: the next generation jockeys for position as china's elite map the road ahead, promising discipline and a crackdown on corruption. stronger yen, weaker global demand, japan at sports fault.
9:01 pm
deal for time warner faces a rough ride in washington with critics on all sides raising questions you'd the asia-pacific's richest woman will have to dig deeper issues to pick up australia's most iconic cattle stations. right, half an hour away from the start of the session in hong kong. taipei, kuala lumpur, singapore just coming online. a mixed bag. what have we got? david: that's what we have, a mixed bag. we are not really going anywhere when you look at the regional benchmark, basically flat. a lot of deals coming through, a lot of data, but domestic in nature. inflation read out of singapore. trade numbers not as bad as expected, pretty much flat. when you look at the equity market today and what is driving
9:02 pm
things is what is happening in the forex markets, the dollar goes from strength to strength, the dollar index now 98.70 level. you have a lot of her earnings in the u.s., gdp out of south korea tomorrow, .5 percent gain their, markets opening up, not too much time, the new we go, this is your market story for the day, u.s. dollar continuing to add shire. -- two edge higher. i'm wondering which one is actually leading -- i'm guessing it is the euro. 108.74. you want to watch the low that , takes youarch 1 back here, 108.60 and change, so we are very close to that.
9:03 pm
to watch. a lot of it is dollar strength. get clearer than bureau-dollar. -- euro-dollar. up,exchange rate has gone one day chart, the move up, weakening as we get closer to that fixing. a lot of banks have come out with their own models. where looking at a number north fixing,for that yuan roughly, of course. all yours. rishaad: right, let's get to first word news. sachs ceogoldman
9:04 pm
lloyd blank find says he personally supports and admires hillary clinton. he previously shied away from backing a presidential candidate , saying his support would harm that person's chances. lloyd blank find now says he is supportive of clinton, although he does not agree with all policies. clinton has been attacked for links to goldman sachs. analysts sayy to blame fore friday's attack on some of the most popular websites. hackers launched a denial of service attack on a dns provider using malware infected devices connected to the internet. sites including twitter, spotify, credit, cnn, and the new york times were taken down. jack ma has some advice for the nation's top security bureau. he is proposing using big data to prevent crime.
9:05 pm
in a televised speech to security officials, he said it was normal to buy a pressure cooker and gunpowder, but it is not normal to buy them altogether. he said the data would help the government notice suspicious transactions and take print of steps. -- and take preemptive steps. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. thanks. activityflurry of m&a continues with china oceanwide , buting to buy genworth the blockbuster deal is at&t's takeover of time warner. it does phase quite a rocky journey at the moment, not least because it is an election year. the deal is supposed to close by the end of 2017, but lawmakers looking at the deal,
9:06 pm
regulators will get involved as well. combined at&t's distribution with time warner's content, but there are still concerns raised. could make it difficult for competitors to get time warner programming. not carrycould also rival programming. an acquisition would potentially raise significant antitrust issues. a joint statement from republican senator mike lee and the democratic senator, the chairman and ranking member of the senate judiciary subcommittee on consumer rights. this panel will hold a hearing in november. it is not known whether it will be before or after elections. spokesman for hillary clinton told reporters that she thinks regulators should look at it. donald trump said he would block the deal.
9:07 pm
the in 2011, we saw conquest acquisition, and there were similar concerns raised. approvedeal was only with conditions and that protecting competition, but the landscape is quite different, and antitrust regulators have challenged it. we will have to see whether the remains more issues going ahead for this deal. rishaad: tell me about this genworth and china oceanwide deal as well? payhina oceanwide will $5.43 a share. china oceanwide also agreed to provide $600 million to genworth millionss debt, and 525
9:08 pm
for its life insurance business. genworth has been hurt by higher than expected losses. china oceanwide plans to let genworth operate as a stand-alone company. it could get a further boost from this news. the deal is expected to close by the middle of next year. right, we are at the start of the most important few days of the year on the chinese calendar, top leaders behind closed doors for the sixth party plenum. we have the 13th five-year plan. we have a standing committee. >> next year's party congresses what we are leading up to, twice a decade big gathering, and a critical one at the midpoint of's we don't have a list of names
9:09 pm
for his successor that. rishaad: there is speculation on whether he will go on longer. >> to be the great leader, but we don't know that yet. this will not likely be decided at this plan, but why this is relevant is because this is behind closed doors. party gete communist all their dirty work done behind closed doors ahead of the various different things on the calendar like the national people's congress, where they read the work reports, and it has been pretty much all been decided in meetings like this. will probably continue to insist on party loyalty. he will enforce party discipline, and that comes back -- we are not expecting major economic policy shifts. we could get more reforms on state owned enterprises and a further revamp of the military, but the key goal of xi jinping
9:10 pm
is the corruption probe, and he will try to institutionalize that. it will institutionalize the anticorruption campaign. it had tens of thousands already snared, 23 central committee , thers or alternates tigers some flies, so we don't know how many more tigers and flies will be ensnared in this, but he was to keep this as part theolicy going forward for party and keeping that discipline among those members. rishaad: thank you very much indeed. still ahead, as the global workforce ages, can productivity provide an offset? we are asking morgan stanley that question. later, low-risk and plenty of opportunity. ♪
9:11 pm
9:12 pm
rishaad: nice day in hong kong
9:13 pm
at the moment. else else is going on, a mixed bag of the moment. we do have the asx down 5.5%, nikkei to 25 unchanged, and straight times indexed in singapore edging up ever so slightly. moving to the upside. hanjin shipping having a tough , seekings stock sink court approval to liquidate european operations. the judge has yet to agree to the sale. the european operation yields lower margins than its u.s. routes. the court has said it wants to sell hanjin as a complete into
9:14 pm
the. collins is betting airliners will be smarter with the $6.4 billion deal for b/e aerospace. it should allow rockwell to provide new information to airlines to the deal is that 23% premium over b/e's last close. national security said to have killed a deal by china's anbang insurance to buy a hotel in california. about $1is worth billion. peninsula that a is one of the main training grounds for navy seals. asian equities having a mixed start. guest says they are in a positive risk environment.
9:15 pm
thank you for joining us. it is a low risk world providing lots of opportunities. let's get to how you came to that analysis first. >> thank you for having me. , thehings we monitor market risks, how riskier market is, how much loss you could incur by being invested in one, and a cross-sectional volatility within that market between winners and losers. opportunity for someone who is a stock picker. ,hat we have is brexit ,eopolitical uncertainties close calls between clinton and trump, so a negative wrist environment with volatility shrinking. in q3, we saw that reverse.
9:16 pm
we saw market risk by down. it's the low for the year. across volatility has increased, so you have more chances to pick winners and losers. the risk environment is quite conducive for stockpicking. rishaad: that's just the point, isn't it? we are just getting the yuan fixing coming through. 6.769. another moved to weaken the yuan here. what does that mean? what does this weakness trend and the policy behind it trying to do? on ais is a minor move domestic currency, so it will not affect global markets too much, but it is a sign that central banks are out for themselves. they would like to export their way out of the recession.
9:17 pm
it's easier than two force painful reforms at home. we are seeing that with other currencies. the dollar has strengthened because u.s. interest rates are supposed to turn up any day now. they are getting momentum from that. don't have to do much to weaken their currency. it just happens. there is a lot more coming out of the moment from the pboc, reverse repos taking place, that fixing, so let's get to david. david: let's put everything together. 690, roughly in offshore exchange rates were closing in on 6.78, which is a record low.
9:18 pm
bloomberg dollars spot index to put everything into context, not just the renminbi, a lot comes down to strengthen the u.s. dollar. it is up to interpretation. yes, we are getting an injection of money, a fairly big amount. they do this every day when they open market operations, seven, 14, 20 eight day reverse repos roughly speaking, an injection $25 billion today. rishaad: thanks. let's get back to our guest. we saw this fixing, so how much is a function of the dollar strengthening? the factis down to that every central bank is out for themselves in the game is on when it comes to currency wars? >> it is a little bit of both.
9:19 pm
right now, china is less worried about their currency and more worried about creating liquidity traps. to provideying liquidity in the market so that there is no squeeze anywhere and interest rates remain stable. risk,t see that as a big but it is a trend than something that investors have to look at because of the dispersion across central banks will only increase in the next year, so i would hedge currency rates when we look at international equities. rishaad: currency risk is one thing. you wereomething, outlining geopolitical risks saying they are waning. the election is not a done deal. >> that's true. ball, the u.s. --
9:20 pm
and, the u.s. elections, down the road the french and germans. the spanish one seems to have settled down, so the u.s. is next. remember things look good for brexit in july, so we could see as surprise. there does not seem to be betting on a surprise. they are betting with consensus. what we have seen in the risk figures is that industry risks ,ave dropped tremendously in q3 people less worried about the impact on the economy, but style risk is the dominant sort of risk. so you must focus on the construction of the portfolio risks,ure you neutralize all of these things need to be looked at because they are the dominant source of risk. rishaad: the other risk is japan and the europeans perhaps lessen
9:21 pm
the quantitative easing programs they have in place. they as effective as those in the u.s.? >> that's right. have been a source of volatilities and they started, but what we have seen in q3 and this drop in industry risks, it tells us investors have not given up on qe programs, but they have lowered their expectations of what they can do and have gone back to not turning the economy around to a big boost, but let me go in and find those companies that have good products, good management, selling well, raising revenues and focus on those. shift in investor focus away from qe programs and more towards the down to earth stock selection. great talking to you.
9:22 pm
have a great day. we have to look at all strays most iconic cattle empire. this is bloomberg. ♪
9:23 pm
9:24 pm
group of australian cattle grazers have made a rival head of $300 million or s. kidman and company, beating the offer made by gina rinehart and hurt chinese business partner. what do we know about this bid? it is quite likely you have never heard of these people before. they go by the acronym bbho. by the names of the
9:25 pm
individuals involved. they are all very well experienced, well established cattle grazers in their own right. northern in the territory was once 2 million hectares. they are no neophytes when it comes to the world of cattle ranching. property is over , 1.3%0 square kilometers of the whole of australia. together ine australian fashion with two honors having a chat over the fence one day. rishaad: where does this leave the bid of gina rinehart and
9:26 pm
hurt chinese business partner? paul: it is still a live bid. rivalhough on paper this bid appears to be larger, the $277 million bid from gina .inehart is comparable in size tubing bids are about the same size. it will boil down to gornment intervention. we have seen a bid for the s. kidman property not back before because one area is near a testing range, so some national security significance. the other bed is entirely austrian and does not need government approval. toare seeing gina rinehart expand from mining into agriculture. in 2014, she bought two west australian ranches.
9:27 pm
rishaad: thank you very much in the. shopping, china's m&a spree, the major deals and challenges involved. hong kong and shanghai open as well. ♪
9:28 pm
9:29 pm
rishaad: we are back now. this is "bloomberg markets: asia". i am rishaad salamat. having a look at what is going on. we haven't seen much money coming out of china. money flowing into hong kong drying up to some extent. moveis after a massive when it came to just before that golden week holiday. we're talking about a trickle here. spending in shanghai $8 billion on hong kong shares,
9:30 pm
the biggest inflows since 2014. net buying this month has been 7% of that amount thus far. we are looking at this narrowing shares and hween a shares. let's get to the shanghai and hong kong open. here is david. david: it's all about the currency markets. go,hore renminbi, there we 6.78 is your level following the fixing. it was not a big surprise. when you consider dollar strength, the drop in the pound and the euro. the fixing was north of 6.76 , so that's what
9:31 pm
were getting. this wall have a follow on effect with other majors. should be down, there you go. have a look at the aussie dollar, flat at the moment. stirling is what you want to watch, one .2 to the last time i checked. that's 1.22 the last time i checked. , a look across assets. crude down a little bit after iraq signaling opposition to output cuts. that is your 10 year yield, not much change. gold pulling back, but holding on to the 1260 level. here is your open across the chinese markets. nothing special there.
9:32 pm
down the little bit in hong kong res pulling back. we are watching china oceanwide falling this deal to buy genworth. upgradeau getting an from over stanley, overweight, and morgan stanley saying this move is coming on the back of their outlook on future growth for the company as well as their dividend. china unicom down 1%. there we go. 6.7839, record low is 6.7850, very close. keep an eye on this. rishaad: right, first word news. let's find out more. pbocnda: that the
9:33 pm
weakening the yuan, heading for a record low with policymakers with policymakers signaling they were allowed the kleins following a fallen supports. -- allow the kleins japanese exports fell in september as the economy continues to struggle with a resurgent yen and week local demand. overseas shipments fell 6.9% from a year earlier, while imports shrank 16%. to a trade surplus of $4.8 billion. the has gained 16% this year. hanjin slumped after seeking to liquidate in europe. a spokeswoman says hanjin wants european union
9:34 pm
branches, including regional headquarters in germany as early as this week if i plan is approved by a central district court. the judge said it would prefer to sell hanjin as a complete entity. china oceanwide will buy genworth financial for $2.7 billion in cash. china oceanwide will pay $600 s andon towards genworth' put 525 million in the u.s. insurance business. it will keep his base in virginia. china oceanwide has operations in real estate, electric power, an investment. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: having a look at the oil market, opec trying to finalize its deal to limit output.
9:35 pm
but there arened, fresh doubts about the plan. iraq says it should be exempt because of the fight against islamic militants. arguing that we have this war going on. we need as much oil as we can on the market. >> they are under pressure from islamic militants, but this is typical posturing prior to an opec meeting. and sayl come out whether they should or should not be exempt. expect to hear more of this. rishaad: what is iran saying? >> iran is exempt. libya, nigeria, and iran are exempt. those limits will be set. oil is holding around $50 a barrel. it seems the market has a mindset to wait and see before
9:36 pm
-- gets exempt,raq then it will be seen as a new block, iran and iraq as a foil against saudi arabia. looks like saudi arabia might be the one that takes on the bulk of the cuts. it has always been in the past. the other thing is that every opec member wants to do something to help the market, putnone of them want to anything into practice, so they are all relying on saudi arabia to do the cuts. we will have to wait and see until we get to that meeting, but it looks like saudi arabia ll be shouldering much of the burden on that front. this week, opec conversations taking place. also, earnings season and the u.s. carry on.
9:37 pm
su keenan has a look ahead. the week ahead on wall street will be chock full of earnings. one of being a double whammy for isestors and for consumers apple. quarterlyreport earnings and unveiling the latest products having to do with their macs computer line. meanwhile, it is a week when many of the biggest names in wall street stocks will be reporting. we will be having a report from also, ford motor company out with earnings on thursday, and google's parent company alphabet will be out on thursday. at&t, fresh from announcing his to deal with time warner will be announcing its earnings tuesday after the bell. in terms of other earnings, deutsche bank is a major focus
9:38 pm
, particularly in light of speculation that they will reduce their presence in the u.s., particularly in the investment banking sector. other spotlight news and events for the week ahead will be the latest economic reports, gdp is addicted to come in stronger than before at about a taste of 2.5%, and consumer confidence in october according to those surveyed by bloomberg to have perhaps weekend. akened.a rishaad: china has been on a buying spree. jonathan browning has been crunching the numbers. he joins us now. regulatorys been opposition mounting. of it from thek
9:39 pm
u.s. and european perspective, currency regulators and other agencies that make up the group of bodies that look at these deals, these are the generation noew savvy dealmakers this new generation needs to get to know and get on side. give me an idea, what do they have to do to clinch some of these deals? >> what it seems to come down to is a lot of pre-deal word, notifying in advance, getting people on site. midea, not a name that a lot of european entities with no a huge a'sunt about, they got kuk management and customers on site. with their support, a deal is much easier. as aad: that is midea
9:40 pm
savvy dealmaker or facilitator, but what about the challenges being faced of the moment? how do we get around them? ands look at the context see how much dealmaking has been going on over the last 10 years. we will do that after you tell us the challenges we are facing. >> we have an increasing the , which is thess committee on foreign investment in the u.s., scrutinizing deals, blocking one or two bank deals this year. if it's not blocking comest of manning serious mitigation. the deal to buy the printer business is requiring a significant commitment. look at let's have a this. this gives us an idea of how much. there we go. let's have a look at it. this what we have. it is growing. 2007, $22.5 billion in
9:41 pm
overseas deals by china come terre battue $390 billion by the u.s. it keeps steadily going up as we this 10 year $206.5 billion, u.s. $190 billion. half-and-half going to the new economy. >> it is an extraordinary spike. there really interesting one is the kim jong-un a deal -- kim china deal from surgeons a soa,hina was a traditional but it's probably the only one that has bridged the gap. rishaad: that is $47 billion or
9:42 pm
thereabouts? thank you very much. our next guest thinks emerging markets look more stable than developed ones. global economics at morgan stanley will be with us in just a minute. ♪
9:43 pm
9:44 pm
quick check of the latest business flash headlines. -- a quick check of the latest business flash headlines. of 3.8% over the past year as an average, and in the to the longest earnings recession since the end of the financial crisis as investors remain cautious because of the presidential election of an interest rate hike.
9:45 pm
economy weathering brexit better than anticipated, but still heading for its weakest performance in the year 0.7% last quarter, but economists looking at .3% growth since the decision to leave the european union. the pound has dropped 18% since that vote. that data will be released on thursday. the british banking group sang lenders will start relocating out of the country ahead of talks on brexit. the british bankers association saying smaller banks will begin the move, with bigger names following in the first quarter. a chief executive saying banks as thean for the worst debate is taking the u.k. in the wrong direction. let's have a look at some things we are watching through the next five trading days.
9:46 pm
following his trip to china, the philippine president making his way to japan on tuesday. claims in thel east and south china sea will likely be raised during that this meant, as well as investment opportunities. an ipo, thegs third-largest in the world this year and should raise $4 billion. bank of china kicking off earnings season. no profit growth expected as bad loans continue to rise. agricultural bank out with figures thursday. after that, icbc. samsung, third-quarter sales figures after capping profit guidance.
9:47 pm
it is all down to that note 7 phone crisis. operating profit cnet $4.6 billion. samsung cutting quarterly revenue forecast by 4%. data, presidential election, political events around the world making the immediate future more difficult to read. pendulumguest suggests of uncertainty is swinging from emerging to develop markets. developed markets. first, let's get you up to speed market wise. the biggest data point will be gdp out of the u.s. janet yellen will be talking. right now, a very short break. ♪
9:48 pm
9:49 pm
9:50 pm
rishaad: we are looking at what the week holds for us. thank you for joining us this morning. will beest data point third-quarter gdp in the u.s., isn't it? >> yeah, the focus is on the the elections rather than gdp, but gdp is supposed to be fine. this quarter, consumption was holding up well. gdp closer to 2.8%. absolutely, but is this going to be the data point where nay? yellen says yay or >> the focuses more on unemployment data rather than growth. growth is useful to tell you
9:51 pm
where things are, but the more important focus for the central bank right now is inflation, and that employment data. that data point is coming out soon. i think the focus will be on what happens to the outlook on inflation, which will be conveyed by what is happening to unemployment. rishaad: let's move to what else is happening. house prices in china, they have stabilized a little in october after an absolute tear in september, but still rising, and of course creating perhaps this fear that they are in bubble terrain. are the authorities getting busy on this? >> absolutely. bankard the pboc asking executives to slow down on housing loans. number -- the
9:52 pm
amount of loans disbursed on account of household loans in the last 12 months, $850 billion, and this compares to the preceding 12 months of $450 billion, so there has been a massive increase in household loans, particularly mortgages, thisoc is concerned about and tightening the rules for lending for banks going forward because this could turn out to be a bigger risk area later on. rishaad: indeed, and i guess off,this plenum starting how important will that be even though it is behind closed doors? yeah, i think considering that it is coming up before the october 7 political shift, we suspect that the plenum this
9:53 pm
year will not come out with something aggressive on the economic front in terms of big reforms. a will probably be continuation of what is going on, and the focus might be on the anticorruption drive and debate on that front. economicexpect big announcements in this plenum. rishaad: let's move to the research, talking about the pendulum of uncertainty, saying positive developments in the emerging markets space have boosted investor confidence, whereas in the developed markets, it is quite the reverse. yeah, the developed markets are mired in this political uncertainty. thention the u.s. in elections, but the same thing is going on in europe as well, brexit, a elections in france and germany in 2017, and the whole decision about how to strengthen the euro area, and
9:54 pm
the decision for the u.k. to exit,, so uncertainty has come back in. they have tightened monetary policy, and now they're taking up his goal consolidation. when you think about brazil, which was emblematic of all the problems emerging markets were there are bigger concerns and devote markets than emerging markets now. rishaad: great talking to you. right, in a small coastal town in japan, uber is working in a way different to the rest of the world. its average passenger is over 70 and most don't own a smartphone. tell us a little bit about this town and why uber japan is interested in it? >> it is all about regulations.
9:55 pm
can't operate in places like tokyo because drivers need holding special licenses, and so where it is allowed to operate are in places where there are no taxi services. uber is going there and getting its ridesharing program up and off the ground in japan because it can't do so in the big cities. in the market there, the taxi market there, is enormous. lp overs this program healt and those who are trapped in these villages? >> exactly. by some estimates, tokyo is the biggest taxi market in the world at $17 billion. uber is trying to build up goodwill. if it finds success and 500
9:56 pm
towns outside of tokyo and other areas, it's hoping it can get enough political clout and goodwill so that it can then help convince regulators at the central government to loosen allow them tod operate a full-fledged business in a lucrative market like tokyo. taxis are watering the -- are extremely expensive. yes, uber is changing its strategy somewhat. it pulled out of china. it is trying to get into new areas like food delivery. being done probably to make a lot of money, but it is laying the groundwork to try and take a slower approach, which is not typical behavior you have seen from a hyper aggressive company like uber up until now. rishaad: thank you very much indeed for that.
9:57 pm
right, coming up in the next hour, as china's top leaders gather, we discussed what could be on the agenda. ♪
9:58 pm
9:59 pm
♪ 10:00 p.m. in new york city. this is bloomberg markets asia. ♪ the offshore yuan heading for a record low. a slump in exports and a strong dollar. trading down in japan. a stronger yen and weak global demand. they fall for a 12 consecutive month. shipping slumping after confirming it wants to offload
10:00 pm
his -- china maps the road ahead. the party promises greater discipline and a new crackdown on corruption. juliet is taking a look. no real standouts currently. little bit of a mixed start to this training session. trade data coming in slightly better than what the market was looking for. we saw a little less movement coming through in terms of exports and imports. korea looking very strong. you are seeing strength on the shanghai market in early trade as well. hong kong coming back online after being close on friday due to the typhoon. quite a bit of support coming
10:01 pm
through. you are seeing a little bit of weakness coming through in some of those consumer-related stocks. certainly underperforming the rest of the region. the rest of southeast asia looking ok. you are seeing weakness coming through, dragging down the overall region index. health scope still continuing to extend those record lows that we saw on friday, near 18% drop coming through. disappointing first-quarter numbers. very much a mixed picture. tech stocks outperforming in the region. offshore, very much heading towards that record low. .11% against the dollar. it is tolerating the cries with a yuan.
10:02 pm
081%.xchange rate down by . market sentiment is relatively negative in the near-term as we see these hit record lows. following the fix it -- this m orning, it is also weaker. then you have a bloomberg dollar spot in next holding a seven month high. a lot of strength coming through in the dollar. a lot of movement coming through. let's get to the first world news. -- first word news. of reducingpes prices have been hit by the reluctance of its second-largest member to cooperate. iraq says it should be exempt
10:03 pm
because it is embroiled in the fight against islamic militants. baghdad also says a currently produces less than 4.2 million barrels a day. iraq says more than 4.7 million and kid go higher. goldman sachs ceo says he personally supports and admires hillary clinton and interview with cnn. he previously shied away from publicly backing a candidate, thing is supported on that person's chances. but he says now he is supportive of clinton, though does not agree with all of our policies. clinton has been attacked for links to goldman sachs. three-year rally for indian small stocks may extend further on growing signs interest rates are going down. they india is in a very sweet spot with lots of opportunities. the emerging markets group has made india topic, investing as much as $2 billion in equities. cyber security, malware
10:04 pm
targeting the internet things may be to blame. hackers launched a so-called using of service attack tens of will -- millions of malware devices connected to the internet. sites include twitter, spotify, read it -- reddit, and cnn. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. china agreeing to buy for $2.7 billion. but the blockbuster deal of the year is this at&t $85 billion takeover of time warner. let's start with that. right from the get-go it is facing a lot of challenges.
10:05 pm
partly because of the size. >> this deal is expected to close by the end of next year according to the company but is subject to review from the department of justice. already we have u.s. lawmakers looking at the deal because of the size. rishaad: the presidential election campaign also ways into this. donald trump saying he would not allow it. saying thatlinton she would certainly think that regulators should look at it. there is a senate judiciary subcommittee on competition issues. basically, there's two people in this. there said an acquisition of time warner by at&t would potentially raise significant antitrust issues. time warner, which owns cnn and
10:06 pm
hbo, they're one of the biggest content providers around. although they are not direct competitors, there are potential issues. at&t could make it difficult for competitors to get a hold of time warner programming. that has been partly one of the concerns. in 2011, the approval for comcast to buy universal company approved that deal with conditions and at protecting competition. now the landscape is a little different. there has been more scrutiny of big deals like this going through really regulators as well as by lawmakers as well. rishaad: tell me a little bit bout china, ocean wide it -- wide. $2.7 billion in it covers energy, real estate and finance.
10:07 pm
4.2% more than the from -- than the friday closing price. this is a chinese company looking to put money outside china. also trying to find an investor outside of the chinese borders. it has agreed to provide $600 million -- 525,000 tie to long-term care coverage. they will letg them operate as a stand-alone company. they could get a further boost on this news. the deal is expected to complete by the middle of next year. rishaad: thank you very much. let's move to shipping. rough time. they want to liquidate in europe.
10:08 pm
a judge has yet to agree to the sale. we're joined from singapore. why are they closing down in europe? well, they are closing down because ever since they filed for bankruptcy protection in late august, they have not been able to do any of their business. europe, it has already been dominated by the big players, and they were only a small player. after the bankruptcy protection, the business has basically slumped since then. no one is using them now. they are more focused on uploading vessels that were stranded because no one wanted to take them in because they were worried about not being paid. a lot of the vessels that they have actually chartered are actually being returned. they do not have a lot of
10:09 pm
vessels left to do much business anyhow. it makes more sense for them to liquidate it at this point. rishaad: exactly. what other steps are being taken as well? they deemed that probably the asia, u.s. trade network might garner some interest from companies that want to expand market share on that route itself. it is one of the world's two biggest shipping lanes. one is asia europe. they hope the asset sale might actually track bigger. they put that on right now. there also talking to sell their states in long beach were terminal that they operate under partnership with msc right now. they're looking to sell some of their lucrative assets that they deem are lucrative and hoping to garner some interest there in raise funds. rishaad: right. do we have any clarity here as to what becomes of them, what is
10:10 pm
their fate after this? >> right now we are not really clear what is going to happen because obviously, if they sell the asia u.s. trade, which is been a very lucrative business for them in the past, not much is left for them. probably their inter-asia business. a lot of the media reports are saying there is a chance that hangen might become a very small, regional player after this will bankruptcy thing is resolved. it is something we need to wait for the court to decide. decemberl have until 23 to submit their revival plan to the court. it is still up in the air whether the court will accept it or not. rishaad: thank you very much. taking tradingo
10:11 pm
decisions, trust your gut instinct. we're going to hear from my wall street broker turned neuroscientist. ♪
10:12 pm
10:13 pm
♪ quick check of the latest business headlines. the flood of cash, which was seen before the mainland's national celebration earlier this month, has slowed to a trickle. million,t more than $8 that was the biggest since the shanghai will -- to put that into context, net buying this month haseen just 7% of that. chinese billionaire has top advice. he prefers using big data to prevent crime.
10:14 pm
in a speech to security officials, he said it was normal to buy gunpowder. but it is not normal to buy them altogether. he hopes it will help the government -- killed a deality to buy a hotel near naval base in southern california. the sale, said to be worth about $1 billion, after concerns about the -- isis on a peninsula that also one of the main training grounds for navy seals. yuan heading towards a record low. they will tolerate greater declines in the slump in exports and the strength of the dollar. elite gather in beijing to map the countries --
10:15 pm
with ourcuss this chief china correspondent. in a chill -- in a butshell, -- it is behind closed doors so we do not know what is going to be happening other than they're going to be trying to consolidate even further in force and ensure party discipline. ensure more loyalty within the party. and of course, that all goes in lockstep with the anticorruption campaign. he wants to institutionalize that, make sure this is part of -- rishaad: i'm sure you want to ask lee gang about. >> what you think is a top the agenda?
10:16 pm
is it institutionalizing the anticorruption campaign? for the paving the way second, maybe third term for the president? >> i think we are probably at the end of the power consolidation in china. local party secretaries governors seven rotated. the military has been fully restructured, suggesting the president is fully empower. this meeting will probably help him finalize the 19th party congress. i do see that china will enter into a different political economy cycle down the road, perhaps we can expect policy implementation could become more decisive down the road. rishaad: we have got them deciding on the 13th five-year
10:17 pm
plan. i suppose, how will that change from the previous five-year plan? >> the 13th five-year plan should be interpreted with china's third plan reform document. rishaad: that is what we're waiting for. >> that document was released in november, 2013. very difficult reforms. reform will be implementing the next stage. currently there are about 300 counties experimenting this land leasing cycle so that farmers bankingow using their system. you can see this is a defect oh o --fer -- defact
10:18 pm
perhaps in the nex five years, a very difficult reforms could be implemented. as a result, we worry less about china's in debt problem. >> does the shaky economy derail those reform plans? the outflow as we have been talking about, it is weakening. does that weaken their position to accelerate reform? >> yes. if we were to see much lower short-term growth, those necessary forms will be delayed. it seems to be less worried about the short term. is 6.7% forgrowth the first three quarters. the government -- rishaad: it is odd how that growth has been 6.7% for the last three quarters, absolutely insane.
10:19 pm
-- absolutely the same. the growth by at expenditure and production, basically, we may see some overestimation of china's gross numbers so far. but the thing we need to focus on is the monthly gross indicators, such as industrial profitability,m housing market. that thebers to show economy seems to have recovered a bit, but my concern is the median -- next year whether we can continue to see 6.5%, our review is next used just -- next 6.3%.china score
10:20 pm
>> over the next year we could -- a year or so from now, naming five of the seven -- new blood is coming in. he has not even narrowed his list of potential successors. at least publicly. >> that is true. bound by so-called age limit rule, five members of the standing committee members of the bureau would have to step down. by the 19th party congress. we would be able to select five likely minded people -- rishaad: that's -- >> the last time there was quite a bit of fight between the camps. >> there were rumors indeed. in the next five years, the policy implementation could be
10:21 pm
expected more effective and consistent. this is a reason i think down the road, shropshire reform such as highly indebted soe sector could be dealt with. if you look at china's debt problem, we worry a lot about soe indebtidness. the many things that this law has allowed the government to issue more debt. is they are trouble being shifted. this could store of problems later on. >> this is a healthy part of leverage in the chinese household sector. the ratio is only 40%. if you compare malaysia and thailand -- rishaad: we have seen how i can
10:22 pm
go wrong. spectacularly. >> we tend to see households where you have to leverage up. household is bound to leverage up. that kind of leverage up in the medium term is a healthy one. we need to see soe de-leveraging take place in the next few years. rishaad: thank you. up next, those who say the sharing economy is all about millennials, do think again. overs average passenger is 70. ♪
10:23 pm
10:24 pm
♪ uber in japan is
10:25 pm
working in a way different from the rest of the world. the average passenger there is aged over 70, and most of them do not own a smartphone. japan is particularly interested. >> it is a small town about a three-hour bus ride. uber is there because it is allowed to be there. there are a lot of regulations surrounding hired cars and taxis services in japan. uber has to go outside of the big cities were basically these businesses do not exist and offer what they call their ridesharing service. it is known as uber-x in the u.s. and uber pop in europe. they are trying to get people like you and me driving other people. it turns out this town is still good old people who need to get to places is to run their daily errands. as well up shop there,
10:26 pm
as another town. market, thes is a japanese taxi market, is absolutely met 0-- absolutely vast. how has this help them gather the rich bits of it? >> essentially gain a foothold. there are about 500 other small towns where it can replicate this kind of model. the bet essentially is that it can spread itself out, earn enough goodwill, political to theto th turn central government, then turn to the regulators and convince them that uber should be able to operate in big cities like tokyo, which is ultimately the prize. rishaad: thank you so much for that. ambitionsout uber's in the country and how they
10:27 pm
minister to achieve them. up next, very much in focus with opec's second-biggest producer. something in the works towards cutting production and stabilizing the market. ♪
10:28 pm
10:29 pm
♪ is 11:29 a.m. in tokyo. these are first word headlines. rate of 6.769 against the dollar, a record low last seen in 2010 with policymakers signaling greater declines after the slump in exports. has reduced pboc support after entering the currency basket. japanese exports fell in september as the economy struggles with a resurgent yen and weaker global demand. overseas shipments fell 6.9
10:30 pm
percent, well imports shrank 16%, trade surplus of $4.16. the yen gained 16% this year. slumping as they attempt to close all european branches as early as this week. if the plan is approved, but the judge said it would prefer to ell hanjin as a complete entity. china oceanwide will pay $2.7 , and putor genworth 525 million into its u.s. insurance business. china oceanwide has operations in real estate, power, and capital investment. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg.
10:31 pm
this is "bloomberg markets: asia". i am rishaad salamat. japan closing out it's morning session unchanged. japan not the main focus for investors today, closing out flat, but look at this rally on the shanghai market, up .6% even as we see the offshore yuan nearing that record low and the currency weakening beyond the year and forecast. .6%e a lot of buying, up despite analysts saying the weakness in the yuan will have negative impact in terms of market sentiment. .04%,ong positive by pretty flat. by .3%, and korea
10:32 pm
up like .1% -- .3%. weakness in australia, new zealand close for a public holiday. some stocks we are watching, $2.7 billion offer for genworth from china oceanwide, not much movement in china oceanwide, unchanged there. higher. is slightly coming under pressure, extending record the declines. lo quite a bit of weakness in that health care space. dollar-yen weaker, pushing towards that 104 handle.
10:33 pm
is weakerre renminbi as well, down by .2%. that is certainly one of the big stories of the day, nearing those record lows against the dollar. rishaad: right, looking at the , $50rice, brent crude, $51 for wti. opec is trying to finalize its deal to limit output, but fresh doubts about the plan. iraq says they should be exempt because it's fights against islamic militants. give us more of the background here. >> another headache for opec really. iraq saying they should be , which puts a lot on saudi arabia to do the heavy lifting when it comes to production cost, but we still have 5-7 weeks to go before we
10:34 pm
find out who is going to be a part of the deal. we have a lot of diplomacy going on at the moment. russia meeting opec representatives in vienna today. of talk and diplomacy behind the scenes, and typically more statements might be seen from more countries. iraq,d: you look at baghdad wanting to be exempt. iran is already exempt. withineates a shia bloc opec, and could be contributed to the politics. >> quite possibly. you can see how iraq might be part ofout not being a that freeze. the market seems to be holding and waiting to see what happens when we get to november.
10:35 pm
the market has become accustomed to seeing these types of statements from opec countries, so it is a matter of waiting to see what comes out. nobody expected them to agree on any preliminary proposal to cut anyway. we are heading in the right direction, and whether we can get there is november. rishaad: thank you very much indeed. let's take a look at the malaysian prime minister. allocates money to the poor, young, and rural voters. he's trying to show up his power base ahead of elections. it is a feel-good budget for cynicslaysians, but would say that the prime minister is buying their votes. haslinda: yes, there is that in the market. as you take a look at this pie
10:36 pm
, the prime minister made it clear that he will continue to empower the indigenous people, so he's giving cash handouts. cheap housing, better power, better water supply for farmers, also discounted student loans for those in school, so not surprising that some are saying using theminister is ewin budget to win support. he's doing that as the economy is slowing and oil is getting smacked. malaysia has been running a budget deficit since 1998, so the prime minister is trying to prop up the economy while trying to get the deficit under control. to do is limitng the damage from the political scandals in the past year. there have been calls for the prime minister to step down, soccer,d in the 1mdb
10:37 pm
global investigation still ongoing. it is a fine balancing act for the prime minister. rishaad: how soon will elections be called? enoughng is, is he doing , are the polls suggesting he's doing enough to remain in charge? well, elections not do until 2018, but it may happen as early as march. opposition lawmakers are saying the budget is an attempt to buy votes and when the heart and minds of the people ahead of the polls. of the budgett announcement, but having said that, the prime minister shows he's ill maintain support. in recent local elections, he boosted his grip on power, and because opposition parties are increasingly divided, his positions pretty secure. rishaad: thank you very much indeed. at the malaysian prime
10:38 pm
minister and the possibility he might be calling an early election. right, a look at china's buying spree. it has announced 200 $7 billion worth of mergers and acquisitions this year. -- 200 $70 billion worth of mergers and acquisitions this year. this has not been smooth sailing , but what do they have to overcome and how do they do it? have had this emergence of a new breeder dealmaker. is gettinges down to and gettingde them on site earlier, the regulators in china and also in the host country. was oned for kuka example of that. listeds a publicly company with a volatile share price.
10:39 pm
minister wasonomy trying to find a rival european debtor that they would be much more comfortable with, but midea got management on side, and they got their customers on side. > rishaad: right, a lot of challenges that have to be faced, so how do they circumvent this? , if we canalmaking look at this chart of the growth and deals, having a look at how between 2006-2007, just what? , and thenion worth suddenly 2013, a veritable explosion, and that explosion is
10:40 pm
explosive this year. we've had $206.5 billion worth of deals. >> a huge spike. loves to write about and talk about. been this confluence of factors that have come together at this moment. that in of itself has meant that you have these new dealmakers. chemchina accounts for a huge number in that chart. they are acquiring expertise when it comes to negotiating all the potential pitfalls. thank you very much indeed for that. dealmaking in china and the explosion in deals. that chart, you can find on the world wide web as well. trader turned neuroscientist says got feelings could be the key to a successful career. here his advice. that is on its way. this is bloomberg. ♪
10:41 pm
10:42 pm
10:43 pm
rishaad: a quick check on the latest business flash headlines. rockwell collins betting everything inside airliners will billioner, paying $6.4 for backing up that claim as they do a deal for b/e aerospace. it would enable rockwell collins to provide new information's two airlines. it is a 23% premium over the last close, expected to the completed early next year. expanding, but economists .3% looking at perhaps growth in the u.k. since the decision to leave the eu, significantly outperforming
10:44 pm
calculations. the pound has slumped 18% since that vote. we look at that data thursday. the head of the u.k. banking group says lenders will start relocating out of the country by the end of the year ahead of her exact talks. -- of brexit talks. the chief executive says banks as thean for the worst political debate is taking the u.k. in the wrong direction. in tune with their heart beat apparently make more money, that's what a former wall street trader says. eva lee believes successes down to what he calls got feelings and a sense of one's own body signals. money decisions are influenced by our own biology. >> we are biological creatures.
10:45 pm
what we are doing and are research project is looking at the effects of the state of our body has on how we perform in trading. i that, it ist inconceivable that it could be any other way. how much sleep you get determines how focused you can be the next day. finance, wes and have never really looked at the affects of our bodies on our ability. >> how reliable is it? could it be superstition or gut instinct? >> one of the first things that happen in your brain and body when you receive a piece of information is that your brain prepares her body. one of the first signals is
10:46 pm
changes in your body, so there is a silent part of your brain that is doing that, and it is pretty good at risk management, so when there is something wrong in your portfolio, your body is being prepared for danger, and that is the nature of got feelings, so it is kind of the way we are built. >> how else could it be translated, a headache? tissue in yourry body is being affected, your cardiovascular system, lungs, heart, muscles, immune system, but it is also possible that each person varies in which of those systems he is aware of. you are aware of that your breathing is faster, but i'm personally a stomach person. when there was something wrong in my position on wall street, i would always feel it in my stomach. there is a test called the
10:47 pm
heartbeat sensitivity test. what does it convey? physiologists and psychologists have been looking for tests for how sensitive people are two signals coming from the bodies. the one way of measuring that has the most research and is easiest to administer his yourbeat awareness, ability to sense how many times your heart has beat within a fixed period of time. >> isn't that the same as being more experienced and therefore being able to decide better? you look at all the factors that go into a successful career, you would probably have a list of a couple of dozen factors, experience on its own is only one of those. we have been looking at a couple
10:48 pm
that have not been looked at sense gotr ability to feelings or changes in our bodies. >> it is gender specific though, right? you are talking about men more than women. circumstances yes, but in terms of gut feelings, there's no difference between men and women. >> how about the element of fitness. from what i have readfilter people make better decisions. the ability tot sense these got feelings waseased the lower your bmi in the lower your heart rate was. let's have a look at what we are watching this week. there is no rest for roderigo to
10:49 pm
ear to -- for the philippine presidents. he's headed to japan to speak to his counterpart there. south china sea concerns are likely to be raised, as well as investment opportunities. shares priced at the top end of for the ipo that is the largest in the world this billion.sing $4 zeroof china expecting growth for profits, bad loans continue to rise, so monitor those. thanks out with results thursday, the next week icbc. ouwith third-quarter sales figures after cutting profit guidance by $2.3 billion this month.
10:50 pm
that was after the note 7 crisis. atrating profit is now seen 4.6 brain, also cutting quarterly revenue forecast by 4%. it is the earnings season in the u.s. we have a particularly busy week. su keenan sent us this having a look at the stories we should be expecting. su: the week ahead on wall street will be chock full of earnings. one of the most important both for investors and for consumers is apple. report quarterly earnings and also unveiling the latest products having to do with their computer line. it is a week when many of the biggest names in wall street stocks will be reporting. we will be having a report from also, ford motor company
10:51 pm
out with earnings thursday. and alphabets will be out also on thursday. at&t fresh from announcing its big deal with time warner will be announcing its earnings tuesday after the bell. other earnings, deutsche bank is a major focus for wall street, partilarly in light of speculation that they would reduce their presence in the u.s., particularly in the investment banking sector. other spotlight news in events for the week ahead will be the latest economic reports, gdp expected stronger than before at about 2.5%, and consumer confidence in october seen according to those surveyed by bloomberg to have weekend in october. right, coming up, the battle for cattle, gina rinehart facing a rival bid.
10:52 pm
we have the details from sydney, next. ♪
10:53 pm
rishaad: this is "bloomberg markets: asia" i am rishaad salamat. australianrival bidders have placed an offer
10:54 pm
that rivals gina rinehart and her partner. give us more on this deal. what do we know about it? paul: it is a group that goes by the name of bbho, an acronym that is made up of those behind it. they did $294 million for the s. properties, over 100,000 square kilometers, and taken together make up 1.3% of the total australian landmass, so very large properties. these four people have the , most of themn it running properties in excess of a million actors -- million hectares. , it willre successful
10:55 pm
enlarge the heard of s. kidman. rishaad: where does this live the bid of gina rinehart and her business partner? still alive. a spokesperson points out that the bids are not all that different once you take into account fees and removing some properties that were in the original offer that are not in this offer. what may in that being the dealbreaker is gina rinehart's chinese partner. that is because one of the properties in south australia neighbors attesting range, an area of some national security concern. this new bid being all australian will be easier to pass government scrutiny, so it does have an advantage. right, thank you very
10:56 pm
much indeed for that. and she has a look at the next hour of bloomberg markets asia. what is on the agenda? how low can it go as the yuan nears to record lows. .t is the weakest in six years policymakers say they are willing to allow greater declines. the implications of that and a whole lot more in the next hour of "bloomberg markets: asia". stay tuned. this is bloomberg. ♪
10:57 pm
10:58 pm
10:59 pm
angie: i am angie lau. david: we are in the middle of the asian trading day. welcome to "bloomberg markets: asia". ♪ angie: the next generation jostles for position as china's elite maps out the road ahead. david: the chinese renminbi headed for uncharted waters, a record low last seen back in 2007. asia's richest woman will
11:00 pm
have to dig deeper to pick australia's most iconic cattle stations. fans are veterans in more ways than one. angie: we have to talk about the chinese yuan. are feelingobally they will let this depreciate more. david: they are letting it move slowly. , i will be back with you in a moment. when you look at the equity markets, ignore what is happening there. there is no point in today. volume today. we are pushing towards 99 on the
11:01 pm
dollar index, weighing on a lot of asian currencies. were looking at pressure on sterling, but were talking about renminbi the, 6.78 is your offshore quote. have a look at the markets. we're seeing a pullback when it comes to oil prices and gold. everything else on the way out. you're getting a decent bid when it comes to s&p futures, a big week for earnings in asia and the u.s. let's get to first word news in the meantime. slumped afterin seeking to liquidate operations in europe. permission to close 10 eu branches, including regional headquarters in germany as early as this week if the plan is approved. a judge said it would prefer to sell hanjin as a complete entity.
11:02 pm
opec reducing production to boost prices, hit by the iraq.ance of it says it should be exempt because it is embroiled in the fight against islamist militants. currently produces less than 4.2 million barrels a day. iraq says it is more than 4.7 million and could go higher. japanese exports fell for a 12 consecutive month as the economy the resurgent yen and weak global demand. overseas shipments fell 6.9%, while imports shrank 16%. that left a trade surplus of $4.8 billion. the yen has gained 16% this year. not guilty to murder nearly two years after police found two women dead in his hong kong apartment. he's accused of killing a ,2-year-old and 29-year-old
11:03 pm
whose bodies were discovered in 2014. he asked them to come to his home. his plea of manslaughter was rejected. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. david: let's talk about the currency markets, because the offshore yuan in focus. from thatches away record low as chinese policymakers signaling their willing to allow more declines. angie: the lowest in six years. exactly is this level here? interesting that that the boc does not appear to have any particular level in mind. does not appear to have any particular level in mind.
11:04 pm
it seems to have abandoned that strategy. it is interesting because it will signal to the market that there is no particular floor for the moment, so it is psychologically significant. question would be why are they allowing this to happen? is there a risk we overshoot to the downside? unambitious gdp target, exports falling by the doesin seven months, so it need to weaken the currency to stimulate exports and the economy. however after we saw what happened in august last year and january this year, it is allowing the yuan to decline against the rising dollar. however, sometimes too much of a free market can be a bad thing. china has the world's largest fx
11:05 pm
reserves, and it can defend its currency when it needs to. pass allows it to drop exacerbates the pessimism on the currency. if i know it would decline, it will make it difficult to take an informed decision and invest in your assets. onwards for two years, we did see it happening. this time around, things have changed. to give the south impression that it is following market moves, so 6.8 is not that far away. you must understand that the onshore currency, the bloomberg estimate median is 6.75 by the end of the year. has droppedyuan
11:06 pm
below that level. looking for a floor. thank you so much for that. they marks the start of most important days of the year on the chinese political calendar, the plenum meeting behind closed doors, mapping the road ahead. the red tide today. david: party type. -- party time. the national people's congress is the rubberstamp legislature. now in the western suburbs of dictate the plenum will what they would do over the next year because what is happening next year is the big party congress where we will get five out of the seven new standing committee members, so there is a
11:07 pm
lot of political jockeying. people are trying to keep their noses clean, if you will, because of the ongoing corruption crackdown. that's another thing that xi jinping wants to do, institutionalize that, ensure party discipline, and party loyalty. david: you mention here that were looking at perhaps promotions. that is what a lot of them are hoping they will get. >> better than demotions. david: or being investigated or put in jail. >> that's right. it will be a fascinating year. you look at this corruption crackdown, tends of thousands if not hundreds of thousands have been ensnared. fact, 23 central committee , highs or alternates
11:08 pm
ranking officials, they have been caught up in the probe that we know of. right now, xi jinping ensures discipline, the marching orders, and everyone else keeping clean and seeing if they can get a promotion. angie: what about theabou rumors that he might not step down after his second term? lead up to the midpoint of the two terms, usually you are starting to get a short list of people who will succeed him. we have not gotten that. so this year will be a time when perhaps xi jinping will narrow that short list, but they are not revealing much. the party mechanisms of trying to position him like now as a "great leader" which will come with great power.
11:09 pm
maybe a third term, who knows? angie: thank you. david: let's check in on how this is playing out across markets. it's not an interesting day, but what is happening? to sell: you know how it. i'm looking at stocks we are watching, a flurry of m&a activity. china oceanwide offering $2.7 billion for genworth financial. financial owns 52% of genworth mortgage. the other stock we are watching is healthscope. record decline on friday, down 19%. shares falling five .5% today after the company warned that hospital earnings growth could be flat if first quarter trends continue.
11:10 pm
the other big movers in region, but pretty mixed in terms of the overall picture. we did have trade data out of japan. japan on the lunch break flat at the moment. no bond purchases today i had of the 20-year note auction tomorrow in japan. the most upside is in the shanghai composite. by 1.2%. ,uite a lot of strength there even though we see fluctuation and weakness in the currency market. the yuan and offshore yuan holding near six-year lows. you're seeing a lot of upside in energy players. crude oil pulling back, but a lot of support. petrochina is up 3%. quickly checking in on currencies, we are seeing the offshore renminbi holding near that low against the dollar, 6.78, and the japanese yen also
11:11 pm
weaker today. by .1currently down percent, pushing towards that 104 handle. david: still ahead, liquidation plans. hanjin shipping confirming it wants to selloff european assets. details later on. angie: we will talk to china -- with richard harris. this is bloomberg. ♪
11:12 pm
11:13 pm
angie: welcome back. i am angie lau. this is "bloomberg markets: asia". warning signs for developed markets, watch out for those our next guest says.
11:14 pm
uncertainty has come back into developed markets. they are taking up the fiscal consolidation, particularly , the source of problems that emerging markets were facing. it is going ahead with consolidation after lifting real interest rates. inre are bigger concerns developed markets now than emerging markets. some shinee could be to founding gold as investors look for safety. if there is continued weakness in the financial sector, if we see sluggish global growth, and if we see a potentially strong dollar, that good for gold. gold is amean that co
11:15 pm
place with a lot of upside opportunity. it is a safe haven. it is all about risk as investors hunt for yield. >> qe policies are the only game in town. becominge they are less effective, but at this point, you have no other choice, so the end of 2016 in the beginning of 2017 looks a lot like we have seen over the last few years where central-banks will push you into riskier assets and continued to be supported by investors moving out of zero and negative rate environment. david: that is the word from asia. our next guest says the search for yield game is over. richard harris, like you say that? >> you only have to look at a treasuries have been doing for the last 20-25
11:16 pm
years. almost nobody is trading -- so how long can that gain go on? think the yield chasing game is pretty much over and people will have to look for something else out there. angie: let's all up 10-year treasury chart. let's take a look. well, i guess you're right. we are not seeing the lows we saw back in june. >> told that back 20 years, you're looking at a line going right down. think what sort of market has been like that. if that was a reversed chart for equities, you would be pretty happy. david: where do i put my money now? buying equities on the fringe, buying the pound, and buying the
11:17 pm
vix if it falls below nine, which it hasn't. >> relatively short-term, relatively long-term. i think we do have growth next year. we have an earnings cycle that is likely to be positive, a be a couple of those, and that might be positive, then some rotation into the emerging markets, so equities look quite good there. look at thee to bond chart to see that there must be some trouble out there. to have a bigy fall in equities unless we have a big rally, but there is trouble out there. schizophrenic, looking at picking up some risk off instruments. angie: today, nothing is really happening today. and taking ae vix look at one year, we are seeing
11:18 pm
it at the lowest in a year, and then if you take a look at how it has been performing, check this out. since 2006ing lows before the big crash there. it is really extraordinary at the moment. has been the most stable i have ever known. dollar compared to the hong kong dollar against the dollar. are we in the eye of the storm or is it the calm before the storm coming. there will clearly be more volatility. the charts might change if the market decides to pop up, but i don't see a lot of reasons for markets to fall off. i see more upside risks than downside. david: we are closing in on 99 on the dollar index. at some point, we will have to
11:19 pm
talk about how this pushes rates backup in 2017. >> traders are still thinking currencies are up, but there hasn't been that much inflation coming through. so currency moves have actually been a free ride. the question is how long will the dollar go positive. it's having a bit of a struggle moving out of these levels, but it's not something people want at the moment. the rest are just having competitive devaluations. is interesting how the macro economics is working out on that. david: the big story is the alternate move in the renminbi, but you still think the chinese yuan is strong. >> i think it is strong. if it was more freely convertible -- and of course,
11:20 pm
that must be so. the economy is weaker than before. i can see many reasons why the authorities want to keep the renminbi reasonably strong or suicidally strong. david: we have this chart of the .ffshore > renminbi if china set let's let the market determine it, when you think? float,t was allowed to it will not be allowed to do that because the outflow of nots at of china, that's what the authorities want, large outflows. david: that's not what we're seeing in hong kong. now we're seeing that dry up. terms of theht in stock connect, but looking longer-term, i think the authorities are very concerned
11:21 pm
about that, and maybe that is more important than allowing a controlled devaluation to stimulate the economy a little bit. david: richard harris, we will rejoin you when we get you back to talkthe gang politics, not just u.s. elections either, maybe china politics as well. good stuff. coming up, at&t's bid for time warner is not the only detail. more details of m&a driving sentiment, next. this is bloomberg. ♪
11:22 pm
11:23 pm
david: time for a quick check of the business flash headlines. shareholders are vicemended to vote against chair lee.
11:24 pm
lee was nominated to the board in september, and shareholders are scheduled to vote thursday. td ameritrade said to be near a $4 billion deal to buy online brokerage scott trade financial services. sources tell us that td ameritrade will take scott freight brokerage operation. two ofl would combine the largest online brokerages. national security issues are said to have killed by china anbang insurance in california. the sale was worth about $1 billion, but was called off after concerns in the u.s. as sits near one of the main training grounds for navy seals.
11:25 pm
china oceanwide has agreed to buy genworth international. at&t's $85 billion takeover of time warner is one of them. it looks like at&t could be facing a rocky road. size of the two companies, $85.4 billion deal. at $107 time-warner point $.50 a share. say the deal did is expected to close before the end of 2017, but it still has to be reviewed by the department of justice, sec, and regulators. looking atave been the deal, and concerns have been raised about antitrust issue.
11:26 pm
it would combine at&t's distribution with time warner's content and programming, so they are not direct competitors, but there are still potential concerns. at&t could make it difficult for rivals to get hold of time warner programming. could refuse to take on programs. in this way, there are concerns. a spokesman for hillary clinton's campaign did say that she had said that indeed they should take a look at it. donald trump has said that he would block the deal from going ahead. already, a few days, one day after being announced. ande: china oceanwide genworth financial, another big deal. >> $2.7 billion. china oceanwide is a closely held family company and will pay
11:27 pm
$5.42 a share. plans to letde genworth operate its own company. david: angie: stay tuned. angie:this is bloomberg. ♪
11:28 pm
11:29 pm
haslinda: the latest first word news. a rate of 7.69 against the dollar. the currency heading for a low last seen in 2010 with policy makers greater declines up to the slump in exports. some analysts think that the pboc reduce support after the yuan entered the imf currency basket. shipping slumped after seeking to liquidate operations in europe. to closece permission 10 of its eu branches, including
11:30 pm
regional headquarters in germany. that could happen this week if the plan is approved by the seoul, korea central district court. the judge had said it would prefer to sell hanjin as a complete entity. motors if i waiting as they -- evaluating a stake in rideshare operators. the company is studying possibilities and open to all kinds of different partnerships. that thehe newspaper buying behavior of the millennial generation is going to alter the way the auto industry works. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. angie: we are seeing things generally looking brighter now than the early part of the session. it is led by the skein in the shanghai market. juliette: it is up by 1.3%.
11:31 pm
some upside in hong kong as well, the hang seng of 5.4% led by energy players, the first time it has resumed trade since thursday. in ireland, new zealand today, weakness coming through in the asx 200 in sydney, down by .7%. resolute mining off by 5.5%. some other movers we are deal, chinabig m&a oceanwide offering cash for genworth financial, genworth sted in sydney. nintendo leading losses in japan, off by about 4% ahead of the earnings later this week. significant weakness coming after its healthscope
11:32 pm
first-quarter numbers came through on friday, extending that record decline, down 5% there, so mixed movement coming through in asian markets. welcome back to "bloomberg markets: asia". haslinda: slumped. slumped. closing downe they or get rid of their european business here? that theve to realize asia europe route has always been dominated by the world's three biggest shipping companies. went into corporate
11:33 pm
receivership, it has been losing business in europe because most of their ships have been stranded. because of vessels being stranded and cargoes unable to unload, they have lost a lot of business and clients to competitors. sense fordoesn't make them to continue considering that it will be difficult for them to win back some customers they have lost. david: what other steps have been taken for hanjin? >> the court is now looking at selling their marketing network for asia-u.s. route, a route has been a big player on, very competitive, one of the top five at one point. so it is a market that hanjin has had an edge over its competitors. the courts believe and hope they will be able to attract some buyers so they can raise funds to pay unpaid bills they oh and
11:34 pm
other stuff, so that is one. hanjin also looking to sell their stake in long beach port terminal that they have under partnership with msc> . so they are taking steps to summon liquidate. angie: what happens to hanjin after this? >> it is not clear what will happen with hanjin carried it seems like the court is trying to decide what part of hanjin mayt raise funds and what not work at all. may be left with interregional shipping business in asia, but it is unclear what will happen. the court is still waiting for hanjin to submit their revival plan by the 23rd. good one.
11:35 pm
joining us live from singapore. investors are playing it safe as opec tries to finalize its deal to limit output. more talks are planned to take place this week. should be exempt because of its fight against islamic militants. that is one reason, but how many more reasons can people come up with? ask our bloomberg energy reporter. what do you think? >> iraq is throwing a spanner in the works of this deal. not many people have thought there was going to be a deal. it is going to the motions of trying to figure out what works expectr all parties, so to see a lot more of these statements leading up to november. it is quite typical of what happens when we go into an opec meeting.
11:36 pm
it is almost normal. angie: the markets are paring back their short and long bets. i want to take you into the bloomberg right now and pull up a chart. this is a wait and see position as we see the position shrink, both short and long, as the opec meeting nears. i guess no one wants to take a bet. look at prices alone, they are almost anchored to $50 at the moment. perhaps taking a wait and see position. we have five weeks to go before that meeting, so typically a lot of members make statements about what they want. wait-and-see,a
11:37 pm
whether they are actually going to cut. sit tight before then and price will hang around that $50 mark. have we heard anything else from other opec members in response to what iraq has been saying? >> russia is meeting opec today in the end. we had a meeting on the weekend between russia and other members. to sticking point here seems be the estimates they are using to come up with those limits on production, so they need to work through that. they need to iron out some difficulties there, but it seems like it is trending in the right direction, and i think the market is showing you that. david: the latest on the potential snack with this output cut deal. angie: let's cast our days to the land down under. a group of australian cattle grazers made it did, a rival bid, of almost $300 million for the cattle stations of s. kidman
11:38 pm
and company, beating the offer of gina rinehart and her business partner. about what do we know this new bid on the table? it is a new bid from a group of people who have had to come up with the name. , an call themselves bbho acronym for their surnames. all four of those are successful and well-established cattle grazers in their own light -- right. one runs 40,000 cattle. if the four of them are successful in acquiring the s. property, that would make their empire even bigger. that property is 100,000 square kilometers. more than 1.3 percent of the total land mass of the country, so it is a very
11:39 pm
large property, and combine they would be running 500,000 head of cattle. where does this live the bid of gina rinehart and her chinese business partners? it is a live bid still on the table, $277 million. a spokesman for gina rinehart points out that once you take included in the original offer, the money is pretty much the same. one important difference is that gina rinehart does have a china business partner. one of those properties in south australia is very close to a weapons testing range, so there are national security implications there.
11:40 pm
that is something the other bid does not have to worry about because it is four all strains, so -- for bank australians, so they may have an advantage. good one there. paul allen live in sydney on the latest for this battle for cattle. angie: coming up, as the offshore yuan nears a record low , our group discussion, coming up next. this is bloomberg. ♪
11:41 pm
11:42 pm
angie: the latest business flash headlines. the u.k. economy may be rates and better than expected, but still headed for its weakest performance in the .ear, gdp rising 0.7%
11:43 pm
18% sincehas slumped the vote. data will be released on thursday. uk's banking says lenders will start relocating ahead of brexit. many smaller banks will begin to move, with bigger names falling by the first quarter of next year. worst,ust plan for the they have been told. the flow of chinese money in the hong kong, stocks drying up. investors in shanghai spent more than $8 billion on hong kong shares in september, the biggest monthly inflows since the stock and it was launched in 2014. buying this month has been 7% of that. david: welcome back. we were just talking about the pound, down 18%, you think it is
11:44 pm
quite cheap and a good idea to buy it now. >> not a lot of people would agree with that. >> that's probably a good thing. one of the problems is that you do end up thinking these things are going to go lower and lower. the hong kong dollar is now 9.4 to the pound, the lowest has , and it seen a lot of punishment. but i would down, be inclined to be a buyer. is dragging down in emerging-market currencies. i think the emerging-market currencies are a bit schizophrenic at the moment. the sensed seems to be that people want to come after them. maybe that is right. i'm not totally convinced about
11:45 pm
that. i think it is a short-term reaction. i think emerging markets might better if we see a continuation of some strength in the equity markets. >> were you surprised that the pboc is allowing this weakness given the outflow situation? surprised they have not done it more. i know they are concerned with the outflow, but when you see other currencies weakening against the dollar, the chinese currency stands out against that. they are in a very difficult position at the moment. >> you think this depreciating yuan is affecting inflows into hong kong? >> i don't think so. the indication would be that close come out. there doesn't seem to be a lot of inspiration in the markets. volumes are very low. on most markets, there
11:46 pm
was very little movement. the yen moved as much as the hong kong dollar against the u.s. dollar last week, very little movement. i think what it means is that people aren't willing to put any money on the numbers of the moment. >> let's talk politics. china, we've been talking about it this morning with you, plenum, critical time for china. , looking toes spread its wings a bit, so will xi jinping bring all those who have not been enthusiastic about following the one line, and maybe this is it. valeant
11:47 pm
because of the slowing growth, there has been talk about putting reform on the back corner. pickgoing to be able to five out of the seven standing committee members, including himself. consolidate his power further, then push his agenda further. >> that's right, maybe even extending age limits, term limits, which is a possibility, so there is a lot happening within that. the question is what is he really looking to do with it? is he looking to pull power into himself to push for reform agenda, or is there something more than that, maybe he wants to be leader for life, which is not been the traditional thing in recent chinese politics? there the possibility it
11:48 pm
is becoming a cult of personality? they aree heard that trying to elevate him to a certain status, "great leader" status. >> that's right. there have been reports this week that what china needs is another strong leader like mao. it is kind of interesting that the two are being talked about in the same breath. >> in the u.s., do they need a strong leader? can we get a close-up of richard's tie? >> right. --s is reflective of >> elephants and donkeys. >> that being said, as we gear up for these elections, markets don't exactly have the best track record. >> the thing is with politics in my observation is generally
11:49 pm
befores a lot of flap the election, then most leaders become more moderate. there are some leaders that don't. markets do get upset, but generally those markets are more volatile than sink into the same old pattern of looking at the same old things. it seems the markets are ready for a clinton presidency because they have priced in. they would not be ready for a dollar trump presidency. >> absolutely not. that's why it would be serious to have a trump presidency because it has not been discounted. if you look at the odds, everybody talks about brexit, but there were strong pushes in swing regions. asswing states, it does look if clinton is ahead and i do believe the market is right. also, there are a lot more
11:50 pm
uncertainties on the trunk side -- donald trump side. there are a lot more uncertainties, which means you could have flip-flopping. >> the polls have narrowed once again. they have, but it is still very difficult when you are behind. you have to do that much more to move ahead. >> some people have are devoted. >> it's all about momentum. >> if you are in hawaii, you are pretty much done and dusted. >> what about the pivot to china by the philippine president? >> the u.s. seems to be keeping a cool approach, which is the right place. , is thisse are similar guy for real? what is he trying to do? is it a and switch? they will try to take advantage
11:51 pm
of the philippine president as much as they can, but whether it comes to anything, i'm not so sure. ford: up next, a busy week corporate's. we will have a look ahead, next. this is bloomberg. ♪
11:52 pm
11:53 pm
angie: welcome back. i am angie lau. this is "bloomberg markets: asia". su keenan looks ahead at some big stories we should expect. >> the week ahead in wall street chock-full of earnings. one of the most important in terms of a double whammy for isestors and consumers apple. they will report quarterly earnings and unveiled the latest products having to do with their mac computer line. many of the when
11:54 pm
biggest names in wall street stocks will be reporting. we will be having a report from tesla for instance, ford motor company also out with earnings on thursday. google's parent company alphabets will be out on thursday. at&t, fresh from announcing its big deal with time warner, will be announcing its earnings tuesday after the bell. of other earnings, deutsche bank is a major focus for wall street, particularly in light of speculation they will reduce their presence in the closeaccording to those to the matter in the investment banking sector. and eventsight news for the week ahead will be the latest economic reports, gdp expected to come in stronger than before at about a pace of confidence inumer october seen to those surveyed to have perhaps weekend in
11:55 pm
october. right, and were talking 40% of the s&p 500 reporting results this week. turn our attention to japan because there is a small coastal town where uber is working and a way that is different than the rest of the world. of the passenger is over 70 and most of them don't even use a smart phone. tell us more about this town and why uber japan is interested. >> it is a small town three hours from kyoto. uber is there is because it is allowed to be there. regulations in japan concerning car hires and taxi service are uber can't offer a ride sharing business in big cities like tokyo. has gone out to the small
11:56 pm
towns where it can provide a whoice for older folks don't have access to good public transportation or who can't drive to take care of their shopping and errands. forntially, uber is looking a foothold in markets of that scale. we know that the taxi market in japan is a norm us. how does this uber help more of uber capture more of this market? if they can get a foothold in the small town like this, there's another pilot program in another town and in 500 hamlets across the japanese archipelago. goodwill andg for political clout to make their case to the central government to loosen up some of those guidelines concerning ridesharing and hopefully go after the taxi market of tokyo,
11:57 pm
which is probably the largest in the world, worth about $17 billion. david: all right on the latest from uber in tokyo. bloomberg markets middle east coming up at the top of the hour. what will we be talking about today? >> good morning. we have a lot to get through. first is iraq balking at the opec production deal. we will discuss why they think they should have an exception from freezing production. the tv showscussing in which saudi arabia's economy ministers and civil service ministers came on and told the population about upcoming austerity cuts and the bloated public sector, what needs to be to done to transform the economy. we will discuss that with the radio monitor chief economist, how much needs to get done to
11:58 pm
transform the saudi arabian economy and reduce the reliance on the price of oil. that is all coming up. david? david: right, coming up in a few minutes, angie. angie: thanks. this is blo
11:59 pm
12:00 am
barrelholds above $50 a and the confidence must be rebuilt. deal faces aer rough ride and critics are facing questions. there is a shipping slump and the courts may rule this week.


info Stream Only

Uploaded by TV Archive on